This post was originally published on June 22, 2017. It was revised March 7, 2019.
How can investment management firms seek out the best technology to address their innovation needs, among thousands of FinTech start-up’s forming around the globe? One answer is to leverage established platforms bringing together FinTech and client needs. Recent vendor activity confirms this trend is still relevant, as strategic alliances and acquisitions of these ‘matchmaker’ platforms continues to take hold. Re-read our blog below – which discussed this trend back in June 2017.
Fiddler on the Roof is one of the Broadway’s longest running musical shows and one of my personal favorites. I’ve see it several times and the popular song “Matchmaker, Matchmaker” has been stuck in my head recently. What does this have to do with investment management? I’ve recently come across news of the acquisition of a company called Matchi. No, the company is not a dating website as the name might suggest (e.g., think Match.com), but a site that brings together fintech companies and financial institutions.
After delving into this space, I’ve come across other companies and associations that are fulfilling the same market need. Some organize conferences and boot camps, while others use a collaborative platform/portal approach to help facilitate a match.
On the Matchi website, the company notes the following: “Matchi’s Fintech Matchmaking services and portal are a bridge to vetted, relevant and implementable Fintech solutions from a global pool.” So basically, the company vets the thousands of fintech startup companies and selects those that offer a compelling product or solution for financial services companies. On the other end, these financial firms can leverage the portal to search for specific fintech needs or they can log a “challenge” (such as “I want a more innovative client on-boarding process”) and then the appropriate fintech companies can respond.
Fintech buzz is swirling around the leadership ranks of investment management companies, and startups are forming at a rapid pace. Competition, cost pressures, and client demands are requiring the buy-side to challenge existing processes and create new and innovative offerings. This confluence of factors is surfacing an evolving need for companies like Matchi to facilitate more efficient collaboration – helping the buy-side solve challenges with the latest and greatest fintech solutions.
The purchase of Matchi by a large, global consulting firm also validates the role a third party consultant can add to this collaboration by offering advisory and implementation assistance to both fintech and investment management companies.
While consulting companies like Citisoft have always been involved with software vendor and service provider evaluations, selections, and implementations, these projects have been undertaken from a somewhat established list of known vendors in our space (~100 or so). But in the fintech world, thousands of startup companies are forming each year and vying for billions of dollars in funding.
Although payments and lending are leading the fintech revolution, the buy-side is beginning to seek out more use cases for disruption. Artificial Intelligence (AI), machine learning, data analytics, and Blockchain technologies to name a few will underpin a new wave of innovation. This will create opportunities for fintech companies (new and old) to partner with the buy-side. To get a sense of some leading fintech companies in the Capital Markets space, I recently came across this map Cap Markets Fintech Map depicting 145+ solution providers. How many look familiar to you?
The industry is already seeing a new wave of collaboration sites to bring together investors and investment opportunities (e.g., private investments and real estate), many which are based on new fintech platforms. So, I’m not surprised in the next evolution of collaboration sites focused specifically on fintech solutions. I believe these matchmaking sites will continue to gain traction in helping to broker a “match” between fintech and financial services firms. Citisoft will certainly continue to stay atop the latest fintech trends, so watch this space.
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